What's equally galling is that banks are keen to compete for student accounts but are uncompetitive when it comes to their insurance. I understand some people may want to pay for their policy upfront for a year and forget about it, but insurers should provide both options. For either quotes we are far cheaper than our competitors.
Nottingham, Notts (PRWEB) July 23, 2008
Students who fail to shop around for possessions insurance are not only paying up to £192 more than they need to, but are also being ripped off by insurers who charge for cover when the accommodation is empty, warns Brian Wright, Managing Director of Karmainsurance.com
Insurers quote for annual possessions cover, but Karma's policy is available on a 'pay as you go' monthly basis, allowing students to cease payments during the summer when their Halls of Residences or privately-rented properties are vacant.
Karma recently sourced student possessions cover, including laptops, for two London-based students; a first year going into a Halls of Residence and a second year, renting privately. The online provider found the difference between its 10-month quote of £35.60 for a first year student and the highest annual premium, £94 from Endsleigh, was over two and a half times more expensive.
The second year student quote revealed a £192 price gap - the difference between Karma's 10-monthly premium of £40 and Endsleigh's £232 annual fee.
Brian comments: "Students think they're getting a good deal, but they're not - why pay for 12 months worth of possessions cover when you're only there for 10? This is another example of insurers making a profit at the expense of those who can least afford it and not meeting the needs of their market.
"What's equally galling is that banks are keen to compete for student accounts but are uncompetitive when it comes to their insurance. I understand some people may want to pay for their policy upfront for a year and forget about it, but insurers should provide both options. For either quotes we are far cheaper than our competitors."
Karma is the only insurer to offer competitive monthly and annually payable policies* and one of a few to offer discounted laptop cover and payouts in case of mugging or assault. Items topping the looting list include those that are easy to sell on such as; laptops, TVs, DVD and CD players, ipods, mp3s and games consoles.
It's widely recognised that insurers increase premiums if the Halls or rented accommodation is in a student crime 'hotspot', however Brian believes insurers are wrong to discriminate in certain areas. He continues: "London is classified as having a high crime rate and premiums are loaded as a result, yet it has so many universities and colleges I struggle to understand how insurers can identify which area is most at risk? Since it's difficult to pinpoint exactly where students will be living, Karma puts London in its lowest rated area."
Parents are also warned about adding children's possessions onto their home contents policies. Brian concluded "It's a common misconception that if you have a good home contents policy it'll cover your child whilst away. There are exclusions on household policies such as forcible/violent entry and cover usually only applies to a student's room and not communal areas. Parents' policies require rented rooms to be locked, with a specific type of lock, which as we all know, isn't possible in many house shares.
"Parents should think carefully before they make a claim about the cost of their excess and the impact this will have on future household premiums. I appreciate that with so many insurers charging excessive premiums for possessions cover, it's an appealing option, but the majority of incidents will not be covered by a generic policy which is why it's best to insure with a specialist such as Karma."
- One other provider, Entertainment & Leisure, allows monthly payments, but insists on taking 13 premiums for its annual cover and will only provide a quote once banking details have been given up front.